from the adapt-or-perish dept

Despite the obvious realities that ratings are sharply down and consumers are cutting the cord, there's a vibrant and loyal segment of cable and broadcast executives and analysts who still somehow believe cord cutting is a myth. Every few months, you'll see a report about how cord cutting is either nonexistent or overstated. Often, they'll try to claim that cord cutters are just lame weirdos they didn't want anyway, or that this is just a temporary trend that stops once more Millennials procreate.

Newsflash: it's not stopping.

The latest data from Kagan indicates traditional pay TV providers lost another 1.3 million subscribers last quarter as users continued to flock to streaming alternatives, embrace the use of over the air antennas, or embrace piracy (something analysts traditionally never mention, as if acknowledging this fact somehow condones it). A big part of this latest surge in losses were courtesy of Dish Network, which saw a record 367,000 departures as its satellite TV customers flocked to greener and cheaper pastures, including Dish's cheaper Sling TV alternative.

Industry analyst Craig Moffett, who used to be among those who mocked cord cutters as irrelevant, has dramatically changed his tune over the last few years. He continues to point out that these numbers are actually worse than they appear, since new homeowners and movers aren't signing up for traditional cable at their new addresses:

"It is the largest quarterly loss ever (the first time the industry lost over 1 million subscribers in a quarter),” writes Craig Moffett, senior research analyst, MoffettNathanson.

“With traditional pay TV penetration still hovering close to 80%, one would have expected growth of about 200,000 more subscribers per quarter on average than a year ago, based solely on the new household formations,” writes Moffett. "To the extent we are not seeing these new households in the subscriber data, we can conclude that cord-cutting has accelerated more than it appears, based on the reported subscribership data alone."

Obviously an 80% penetration rate for traditional cable is nothing to sneeze at.

But while traditional cable TV is still the preferred viewing option du jour, it's equally obvious that the industry needs to adapt sooner rather than later. Many of these customers are older viewers scared by new technology who won't be around for ever. Many others are sports fans, who still struggle to find streaming alternatives to cable given many broadcasters' painfully slow adaptation to this new paradigm, something exemplified by the aggressively terrible losses seen by ESPN in recent years. But leagues like the NFL are very slowly but surely figuring out that direct to consumer streaming is the future.

And while a few companies like Dish and AT&T have figured out that they have no choice in offering cheaper, more flexible viewing options (Sling TV and DirecTV Now respectively), much of the sector remains stuck in a dance of dysfunction that includes refusing to compete on price. Whether it's Charter's decision to mindlessly raise rates on the heels of its latest merger, or Comcast using bullshit fees to covertly jack up your monthly rate, there's a cavalcade of industry executives who haven't received one obvious message: the traditional cable cash cow is dying, and price competition and better, more flexible offerings are the only path forward.

from the flip-to-page-45 dept

For over a decade, we have been making the point that the internet is a communications platform, not a broadcast medium. This seemingly obvious statement of fact has long been the subject of legacy content provider objections, which is part of what has led to much of the ongoing conflicts centering around intellectual property and digital business models. With big content players feeling control over their content slipping away in the internet, they have attempted to wrestle back that control by pretending the internet is something it isn't. For that reason, it's always a useful thing to point out to examples that remind people that the internet simply isn't a movie theater or television.

Two of the interactive projects currently in negotiations are based on existing video game properties, the report suggests. That seems to include the previously announced Minecraft: Story Mode, which was largely completed with the help of Telltale before that company's massive layoffs last month. Netflix has frequently said it is not interested in getting directly into the video game business, however.

It's currently unclear just how much narrative branching will be possible in these Netflix specials, or how divergent the storylines can become based on viewer interaction. Filming extra content for such branching storylines can add significantly to the production cost of traditional linear TV narratives to create content that some viewers may never end up seeing.

"Interactive" is the key word here, one which precisely shows the separation between broadcast and communications mediums. It's a small thing, it might seem, and doesn't really touch on the typical intellectual property concerns we discuss at Techdirt, but it also beautifully highlights how the internet and broadcast mediums are simply different. And, if you accept that difference, the obvious conclusion is that they should not be treated and/or regulated as though they were the same. That important distinction has an impact across the world of how the internet functions and is treated by government and the law.

In fact, this type of interactive narrative storytelling has more in common with the video game market, or even the tabletop gaming market, than television and film.

Live TV programs and game shows have long integrated interactive elements via telephone calls, webpages, and custom apps. But fully interactive narrative stories have been more closely associated with video games, from text-based stories like Zork to Hollywood-style blockbusters like Detroit: Become Human and everything in between. This narrative flexibility has also been included in video game experiments focused on filmed live-action stories, ranging from the campy Night Trap to this year's innovative WarGames reboot.

So tuck this one away for the next time you hear someone harping on about how entertainment over the internet should be treated no differently than entertainment offered via broadcast. They're not the same. And, ultimately, that's a good thing, as that dissimilarity is what allows for cool new experiments such as what Netflix is trying to create here.

from the this-is-bad dept

Well, this was not entirely unexpected at this point, but in the EU Parliament earlier today, they voted to end the open web and move to a future of a licensed-only web. It is not final yet, as the adopted version by the EU Parliament is different than the (even worse) version that was agreed to by the EU Council. The two will now need to iron out the differences and then there will be a final vote on whatever awful consolidated version they eventually come up with. There will be plenty to say on this in the coming weeks, months and years, but let's just summarize what has happened.

For nearly two decades, the legacy entertainment industries have always hated the nature of the open web. Their entire business models were based on being gatekeepers, and a "broadcast" world in which everything was licensed and curated was perfect for that. It allowed the gatekeepers to have ultimate control -- and with it the power to extract massive rents from actual creators (including taking control over their copyright). The open web changed much of that. By allowing anyone to publicize, distribute and sell works by themselves, directly to end users, the middlemen were no longer important.

The fundamental nature of the internet was that it was a communications medium rather than a broadcast medium, and as such it allowed for permissionless distribution of content and communication. This has always infuriated the legacy gatekeepers as it completely undermined the control and leverage they had over the market. If you look back at nearly every legal move by these gatekeepers over the last twenty five years concerning the internet, it has always been about trying to move the internet away from an open, permissionless system back towards one that was a closed, licensed, broadcast, curated one. There's historical precedence for this as well. It's the same thing that happened to radio a century ago.

For the most part, the old gatekeepers have not been able to succeed, but that changed today. The proposal adopted by the EU Parliament makes a major move towards ending the open web in the EU and moving to a licensed, curated one, which will limit innovation, harm creators, and only serve to empower the largest internet platforms and some legacy gatekeepers. As Julia Reda notes:

Today’s decision is a severe blow to the free and open internet. By endorsing new legal and technical limits on what we can post and share online, the European Parliament is putting corporate profits over freedom of speech and abandoning long-standing principles that made the internet what it is today.

The Parliament’s version of Article 13 (366 for, 297 against) seeks to make all but the smallest internet platforms liable for any copyright infringements committed by their users. This law leaves sites and apps no choice but to install error-prone upload filters. Anything we want to publish will need to first be approved by these filters, and perfectly legal content like parodies and memes will be caught in the crosshairs.

The adopted version of Article 11 (393 for, 279 against) allows only “individual words” of news articles to be reproduced for free, including in hyperlinks – closely following an existing German law. Five years after the ‘link tax’ came into force in Germany, no journalist or publisher has made an extra penny, startups in the news sector have had to shut down and courts have yet to clear up the legal uncertainty on exactly where to draw the line. The same quagmire will now repeat at the EU level – no argument has been made why it wouldn’t, apart from wishful thinking.

This is a dark day for the open internet in the EU... and around the world. Expect the same gatekeepers to use this move by the EU to put pressure on the US and lots of other countries around the world to "harmonize" and adopt similar standards in trade agreements.

I know that many authors, musicians, journalists and other content creators cheered this on, incorrectly thinking that was a blow to Google and would magically benefit them. But they should recognize just what they've supported. It is not a bill designed to help creators. It is a bill designed to prevent innovation, lock up paths for content creators to have alternatives, and force them back into the greedy, open arms of giant gatekeepers.

from the now-would-be-a-good-time-to-stop-it-happening dept

Yesterday, Mike took apart an extraordinarily weak attempt by the UK's music collection society, PRS for Music, to counter what it claimed were "myths" about the deeply-harmful Article 13 of the proposed EU Copyright Directive. On the same day, the Guardian published a letter from the PRS and related organizations entitled "How the EU can make the internet play fair with musicians". It is essentially a condensed version of the "myth-busting" article, and repeats many of the same fallacious arguments. It also contains some extremely telling passages that are worth highlighting for the insights that they provide into the copyright industries' thinking and ultimate goal. Here is the main thrust of the letter:

This is not about censorship of the internet, as the likes of Google and Facebook would have you believe. The primary focus of this legislation is concerned with whether or not the internet functions as a fair and efficient marketplace -- and currently it doesn't.

Once again, there is no attempt to demonstrate that Article 13 is not about censorship, merely an assertion that it isn't, together with the usual claim that it's all being orchestrated by big US Internet companies. The fact that over two-thirds of a million people have signed an online petition calling for the "censorship machine" of Article 13 to be stopped rather punctures that tired argument.

More interesting is the second sentence, which essentially confirms that for the recording industry, the Copyright Directive -- and, indeed, the Internet itself -- is purely about getting as much money as possible. There is no sense that there are other important aspects -- like encouraging ordinary people to express themselves, and to be creative for the sheer joy of creating, or in order to amuse and engage with friends and strangers. The fact that all these non-commercial uses will be adversely affected by Article 13 is irrelevant to the recording industry, which seems to believe that making a profit takes precedence over everything else. However, even if they choose to ignore this side of the Internet, the signatories of the letter are well-aware that there is a huge backlash against the proposed law precisely because it is a threat to this kind of everyday online use. Attempting to counter this, they go on:

It is important to recognise that article 13 of the proposed EU copyright directive imposes no obligation on users. The obligations relate only to platforms and rightsholders. Contrary to some sensationalist headlines, internet memes will not be affected, as they are already covered by exceptions to copyright, and nothing in the proposed article will allow rightsholders to block the use of them.

Techdirt pointed out yesterday why the first part of that is intellectually dishonest. The Copyright Directive won't impose obligations on users directly, but on the platforms that people use, which amounts to the same thing in practice. The letter then trots out the claim that Internet memes will not be affected, and specifically says this is because they are already covered by EU exceptions to copyright.

Licensing is not an option here. There are many diverse sources for the material used in memes, most of which have no kind of organization that could give a license. The only way for online companies to comply with Article 13 would be to block all memes using any kind of pre-existing material in those 19 countries without a parody exception. Worse: because it will be hard to apply different censorship rules for each EU nation, it is likely that the upload filters will block all such memes in the whole EU, erring on the side of caution. It will then be up to the person whose meme has been censored to appeal against that decision, using an as-yet undefined appeals mechanism. The chilling effect this "guilty until proven innocent" approach will have on memes and much else is clear.

The blatant misinformation about whether memes would be blocked is bad enough. But in many ways, the most shocking phrase in the letter is the following:

Actually, article 13 makes it easier for users to create, post and share content online, as it requires platforms to get licences, and rightsholders to ensure these licences cover the acts of all individual users acting in a non-commercial capacity.

There, in black and white, is the end-game that the recording industry is seeking: that every online act of individual users, even the non-commercial ones, on the major platforms must be licensed. But the desire to control the online world, and to dictate who may do what there, is not limited to the recording companies: it's what all the copyright industries want. That can be seen in Article 11 of the Copyright Directive -- the so-called "snippet tax" -- which will require licensing for the use by online sites of even small excerpts of news material.

It's also at the root of the core problem with Article 3 of the proposed EU law. This section deals with the important new field of text and data mining (TDM), which takes existing texts and data, and seeks to extract new information by collating them and analyzing them using powerful computers. The current Copyright Directive text allows TDM to be carried out freely by non-profit research organisations, on material to which they have lawful access. However, companies must pay publishers for a new, additional, license to carry out TDM, even on material they have already licensed for traditional uses like reading. That short-sighted double-licensing approach pretty much guarantees that AI startups, which typically require frictionless access to large amounts of training data, won't choose to set up shop in the EU. But the publishing industry never cares about the collateral damage it inflicts, provided it attains its purely selfish goals.

Although it's rather breathtaking to see the copyright world openly admit that its ultimate aim is to turn the Internet into a space where everything is licensed, we shouldn't be surprised. Back in 2013, Techdirt wrote about the first stages of the EU's revision of its copyright law. One preliminary initiative was called "Licences for Europe", and its stated aim was to "explore the potential and limits of innovative licensing and technological solutions in making EU copyright law and practice fit for the digital age". What we are seeing now in the proposed Copyright Directive is simply a fulfillment of these ambitions, long-cherished by the copyright industries. If you aren't happy about that, now would be a good time to tell the EU Parliament to Save Your Internet. It may be your last chance.

from the the-internet-is-at-risk dept

One of the oddities of the vote a few weeks back in the EU Parliament's JURI Committee concerning the proposed EU Copyright Directive, was that there was no published text of what they were voting on. There were snippets and earlier proposals released, but the full actual text was only just released, and it's not in the most readable of formats. However, what is now clear is that the JURI Committee not only failed in its attempts to "fix" the many, many, many problems people have been raising about the Directive, but it actually makes many of the problems worse -- including saying that online platforms become legally responsible for any copyright infringement on their platforms. This new text effectively says that the internet should only be a broadcast medium, and no longer allow for open user platforms.

2a. The rights referred to in paragraph 1 shall not extend to acts of hyperlinking.

So now supporters of Article 11 will point to this new line and say "see?!? it's not about a link tax." Which would be great... if the rest of the text actually lived up to that. Unfortunately, basically every bit of the rest of Article 11 undermines that. Because it still creates a license requirement on a snippet of any length, and most URLs these days include a "snippet" of the headline of an article within the URL itself. Unless everyone starts stripping the text that includes such snippets -- making URLs significantly less useful -- those links will still run afoul of this licensing/tax requirement. Thus, them declaring that a hyperlink is not covered is meaningless if the rest of the directive can only be read in a manner that would include nearly all links.

Once again, it appears this amendment was written by someone who has no functional understanding of how the internet works, and thus does not realize how badly drafted this proposal is. It's the kind of thing a non-technically-inclined lawyer would write in response to people calling this a "link tax." "Oh," they would say, "well, let's just say it doesn't apply to links," even if any reading of the directive would mean it absolutely must apply to most links -- especially any that use any sort of descriptive text. On top of that if you share a link on a platform like Twitter or Facebook that automatically sucks in some snippet text, you're now violating the law as well.

Another change made by JURI is much, much, much more concerning. This is on Article 13, the part about mandatory upload filters. For unclear and unknown reasons, JURI decided to expand Article 13 to make it even more ridiculous. First, it redefines an "online content sharing services" to completely wipe out any intermediary liability protections for such platforms. The most standard form of protecting platforms from liability is to note (correctly!) that a platform is just a tool and is not the publisher or speaker of works posted/uploaded by third-party users. That's sensible. You can then (as the EU already does) put certain restrictions on those protections, such as requiring a form of a notice-and-takedown regime. But, the fundamental, common sense, idea is that a platform is the tool, and not the actual "speaker" of the third party content.

But JURI wiped that out. Instead, it explicitly states that any content shown via online platforms are the responsibility of those platforms by saying that such platforms "perform an act of communication to the public" in showing the content uploaded by users. This is a massive change and basically wipes out all intermediary liability protections for platforms:

Online content sharing service providers perform an act of communication to the public and therefore are responsible for their content. As a consequence, they should conclude fair and appropriate licensing agreements with rightholders. Therefore they cannot benefit from the liability exemption provided...

That's... bad. It's much, much worse than the original text from the commission, which made it clear that intermediary liability protections in the E-Commerce Directive still applied to such platforms. Here they explicitly remove that exception and say that platforms cannot benefit from such protections. As Reda points out, under this reading of the law almost any user-generated site on the internet will be in violation, and potentially at significantly greater legal liability than the various "pirate" sites people have complained about in the past:

By defining that platforms – and not their users – are the ones “communicating” uploaded works “to the public”, they become as liable for the actions of their users as if they had committed them themselves. Let’s imagine a company that makes an app for people to share videos of their cats. If even one user among millions uses the CatVideoWorld3000 app to record a Hollywood movie off a theater screen rather than their kitty, that’d be legally as bad as if the business’ employees had committed the copyright infringement themselves intentionally to profit off of it. The Pirate Bay, MegaUpload and Napster were all much more innocent than any site with an upload form will now be in the eyes of the law.

And that's not all that JURI did. It also outlawed image search with an amendment. No joke.

Member States shall ensure that information society service providers that automatically reproduce or refer to significant amounts of copyright-protected visual works and make them available to the public for the purpose of indexing and referencing conclude fair and balanced licensing agreements with any requesting rightholders in order to ensure their fair remuneration. Such remuneration may be managed by the collective management organisation of the rightholders concerned.

This was not discussed previously and not recommended by the EU Commission. But, what the hell, while they're outlawing Google News, why not outlaw Google Images in the same shot.

There's a lot more in the text, but it's really, really bad. Effectively, the document envisions a world in which everything on the internet is "licensed" and any platform will be legally liable for any content on its platform. What you get in that world is not the internet -- the greatest communications medium ever made. What you get is... TV. A limited broadcast medium only for those who are pre-checked by gatekeepers.

It is incredibly important that the EU not move forward with this Directive. Contact the EU Parliament now and tell them to #SaveYourInternet before they vote on this proposal this Thursday.

from the you-know-it dept

Over at the EFF blog, Joe Mullin has an excellent discussion on why Hollywood is such a vocal supporter of SESTA, despite having nothing to do with Hollywood. It's because the bill actually accomplishes a goal that Hollywood has dreamed about for years: mandatory filtering of all content on the internet.

For legacy software and entertainment companies, breaking down the safe harbors is another road to a controlled, filtered Internet—one that looks a lot like cable television. Without safe harbors, the Internet will be a poorer place—less free for new ideas and new business models. That suits some of the gatekeepers of the pre-Internet era just fine.

The not-so-secret goal of SESTA and FOSTA is made even more clear in a letter from Oracle. “Any start-up has access to low cost and virtually unlimited computing power and to advanced analytics, artificial intelligence and filtering software,” wrote Oracle Senior VP Kenneth Glueck. In his view, Internet companies shouldn’t “blindly run platforms with no control of the content.”

That comment helps explain why we’re seeing support for FOSTA and SESTA from odd corners of the economy: some companies will prosper if online speech is subject to tight control. An Internet that’s policed by “copyright bots” is what major film studios and record have advocated for more than a decade now. Algorithms and artificial intelligence have made major advances in recent years, and some content companies have used those advances as part of a push for mandatory, proactive filters. That’s what they mean by phrases like “notice-and-stay-down,” and that’s what messages like the Oracle letter are really all about.

There's a lot more in Mullin's post, but it actually goes much beyond that. Every rock you lift up in looking at where SESTA's support has come from, you magically find Hollywood people scurrying quietly around. We've already noted that much of the initial support for SESTA came from a group whose then board chair was a top lobbyist for News Corp.. And, as we reported last month, after a whole bunch of people we spoke to suggested that much of the support for SESTA was being driven by former top News Corp. lobbyist, Rick Lane, we noticed that a group of people who went around Capitol Hill telling Congress to support SESTA publicly thanked their "partner" Rick Lane for showing them around.

In other words, it's not just Hollywood seeing a bill that gets them what it wants and suddenly speaking up in favor of it... this is Hollywood helping to make this bill happen in the first place as part of its ongoing effort to remake the internet away from being a communications medium for everyone, and into a broadcast/gatekeeper dominated medium where it gets to act as the gatekeeper.

And if you think that Hollywood big shots are above pumping up a bogus moral panic to get their way, you haven't been paying attention. Remember, for years Hollywood has also pushed the idea that the internet requires filters and censorship for basically any possible reason. Back during the SOPA days, it focused on "counterfeit pharmaceuticals." Again, not an issue that Hollywood is actually concerned with, but if it helped force filters and stopped user-generated content online, Hollywood was quick to embrace it.

Remember, after all, that the MPAA set up Project Goliath to attack Google, and a big part of that was paying its own lawyers at the law firm of Jenner & Block to write demand letters for state Attorneys General, like Mississippi Attorney General Jim Hood, who sent a bogus subpoena and demand letter to Google (written by the MPAA's lawyers and on the MPAA's bill). And what did Hood complain about to Google in that letter written by the MPAA's lawyers? You guessed it:

Hood accused Google of being “unwilling to take basic actions to make the Internet safe from unlawful and predatory conduct, and it has refused to modify its own behavior that facilitates and profits from unlawful conduct.” His letter cites not just piracy of movies, TV shows and music but the sale of counterfeit pharmaceuticals and sex trafficking.

The MPAA has cynically been using the fact that there are fake drugs and sex trafficking on the internet for nearly decade to push for undermining the core aspects of the internet. They don't give a shit that none of this will stop sex trafficking (or that it will actually make life more difficult for victims of sex trafficking). The goal, from the beginning was to hamstring the internet, and return Hollywood to what it feels is its rightful place as the gatekeeper for all culture.

Indeed, our post earlier about Senator Blumenthal's bizarre email against a basic SESTA amendment from Senator Wyden to fix the "moderator's dilemma" aspect was quite telling. He falsely claimed that adding in that amendment -- that merely states that the act of doing some moderation or filtering doesn't append liability to the site for content they fail to filter or moderate (which is the crux of CDA 230's "Good Samaritan" language) -- would create problems for Hollywood. Indeed, a key part of Blumenthal's letter is that this amendment "has the potential to disrupt other areas of the law, such as copyright protections."

But that makes zero sense at all. CDA 230 does not apply to copyright. It doesn't apply to any intellectual property law, as intellectual property is explicitly exempted from all of CDA 230 and has been from the beginning. Nothing in the Wyden amendment changes that. And... it does seem quite odd for Blumenthal to suddenly be bringing up copyright in a discussion about CDA 230, unless it's really been Hollywood pushing these bills all along, and thus in Blumenthal's mind, SESTA and copyright are closely associated. As Prof. Eric Goldman notes, talking nonsensically about copyright in this context appears to be quite a tell by Senator Blumenthal.

from the hear,-hear! dept

For this week's awesome stuff, we've got some assorted pieces of new crowdfunded audio gear.

waveBlend

The folks behind the waveBlend make a pretty good point: rigging up a house-wide wireless audio system is still a lot more annoying than it needs to be. The best systems out there are expensive, proprietary and always centralized around some sort of master unit. The waveBlend system does away with that: each modular cubic speaker connect to existing WiFi network and teams up with all the others (up to a dozen — however many you need, wherever you need them) to create a no-hassle home audio setup.

gMIX

On the one hand, the gMIX isn't as big a deal as the creator might want to make it sound — a four-channel audio mixer that runs "without batteries" is just a passive line mixer and not a technological breakthrough. That said, the best products aren't always revolutionary, and gMIX does appear to be filling a gap: pro audio gear is expensive, there aren't that many choices of passive mixers around compared to active (powered) ones, and most such gear includes lots of additional features that aren't needed for a lot of applications. The gMIX, on the other hand, is cheap and simple and gets the job done.

Gigcaster

A lot of the innovation around live streaming focuses on video, while audio is often left to languish in "good enough" territory. That's fine for meetings and conferences and speeches, but not so great for music. Enter the Gigcaster: a compact, standalone unit with the sole purpose of making it easy to broadcast quality live music online. This initial model is built using Raspberry Pi, and there are plans to move towards a more fully-featured production model — but there's also a huge focus on hackability, with the device running open source software and allowing for user-made firmware pushes.

from the there's-much-more-at-stake-here dept

We've been writing quite a bit about the Aereo case lately, which is scheduled to be heard by the Supreme Court in late April. The case has an awful lot of powerful people and organizations lining up on both sides, filing briefs with the Supreme Court. Some have pointed out that Aereo's technology really isn't particularly innovative, and in fact, we've discussed how its setup is basically insane from a technology standpoint, but that the company is forced into building it that way to stay within the law (or so it and its supporters believe).

But some seem to be wondering why this one technology company, with something of a legal kludge is so important. It is incredibly important for reasons that have almost nothing to do with Aereo's actual service. Rather, it's about how the Supreme Court will interpret a key part of the Copyright Act, which could have an astoundingly bad chilling effect on pretty much all cloud computing. This may not seem obvious at first glance, since few people associate Aereo with cloud computing. Matt Schruers does a nice job breaking down the key point, however, as to why this one decision will have far reaching implications well beyond Aereo. And it all comes down to how the Supreme Court defines what is a "public performance."

Aereo’s position is that when Aereo subscribers pay for access to an antenna and direct it to send them back a unique copy of a particular broadcast, this is private. Different users access different antennae at different times, and each user receives a different copy of a work — even if they’re watching the same broadcast. Aereo isn’t rebroadcasting one work to thousands; it gives technology to thousands who at different times use that technology to access and possibly store different copies of works that they’re already lawfully entitled to receive. This is not unlike the Sony Betamax, which didn’t copy television, but gave thousands of consumers the technology to make reproductions of television content that they were already lawfully receiving.

Broadcasters have responded by saying that none of this matters; Aereo is infringing, they contend, so long as a given work is made available to multiple members of the public, even if Aereo does it with different unique copies, and at different times.

The problem with this rationale is that it applies with equal force to cloud storage like Dropbox, SkyDrive, iCloud, and Google Drive. If multiple people store their own, unique, lawfully acquired copy of the latest hit single in the cloud, and then play it to themselves over the Internet, that too sounds like the broadcasters’ version of a public performance. The anti-Aereo rationale doesn’t distinguish between Aereo and the cloud.

If you don't think that copyright holders won't take a victory here and go after various cloud services, you haven't been paying attention to the history of copyright fights over the past few decades.

And this is part of why the US Solicitor General's brief in support of the broadcasters is so ridiculously problematic. It tries to address that issue of cloud computing, by basically saying it might not be a big deal, because no company will require a license. However, other briefs in support of the broadcasters say it's no big deal because everyone can just get a license. One of those can't be true.

the U.S. Government (USG), for example, carefully hedges, saying that a decision for the broadcasters “need not threaten cloud computing.” It conspicuously does not argue that it will not threaten the cloud — only that the decision need not, implicitly conceding that a decision for the broadcasters could still be fatal for the cloud. The USG’s rationale is that as long as a consumer has lawfully acquired media in the first place, no cloud service need worry that someone will demand a license. Inconveniently for the USG, however, several other briefs filed concurrently argue that cloud computing services need not worry because, hey, everyone can just get a license! Setting aside the fact that there’s no way to ensure that all files in the cloud are licensed, this point substantially undercuts the USG’s position. Even as the USG is telling the Court that cloud services need not fear they’ll be demanded to take licenses for everything users put in the cloud, other interests are telling the Court that cloud services should do exactly that. Arguably, it doesn’t advance the broadcasters’ case that even their supporters cannot agree on whether cloud services would have licensing problems.

The ruling in this case matters, even if you don't care at all for Aereo's particular service. The wider impact on a variety of useful services could be massive. In fact, we've seen this before. Aereo's court wins to date rely heavily on the ruling that found Cablevision's remote DVR legal -- which similarly focused on defining whether or not that product involved a "public performance" that needed to be licensed. There, the court found that they did not. However, courts in other countries have found otherwise. That set up a nice natural experiment, and Harvard professor Josh Lerner looked at changes in venture capital investment into cloud computing offerings in the immediate aftermath of similar rulings, finding that the Cablevision ruling (saying not a public performance, and thus protecting the cloud) helped to spur tremendous investment in innovative new services -- to the tune of about $1 billion.

No matter what you think of Aereo, this decision will have a major impact on what sort of internet we have going forward.

from the those-darn-international-obligations dept

For many years, we've highlighted how copyright maximalists have abused the international trade process to expand copyright monopolies around the globe. If you're interested in the history there, I highly recommend the book Information Feudalism: Who Owns the Knowledge Economy?, which details much of the history. Defenders of this policy love to pretend that international trade agreements can't bind US law, but reality is quite different. Time and time again, we've seen maximalists use international agreements to get their way either in ratcheting up copyright law even further, or pressuring courts into certain positions. This is one of the reasons (one of many) that we're so concerned about new agreements like the TPP and TTIP/TAFTA. Even if the USTR claims (incorrectly) that nothing in them goes beyond US law today, they can not only limit the changes Congress can make to copyright and patent law, but these issues can show up in court cases, potentially hindering innovation.

Here's a perfect example. We've been covering the Aereo case for quite some time, and as the Supreme Court prepares to hear the case in April, a bunch of international music organizations, led by the IFPI (basically the international version of the RIAA), have filed an amicus brief that pretty clearly says that the Supreme Court has to rule against Aereo because of existing international trade agreements that the US has signed. No joke. The brief directly claims that the appeals court ruling that found in favor of Aereo "places the United States in violation of its multilateral treaty commitments," as well as "its bilateral and regional agreements," and further that the Supreme Court has a duty to find against Aereo in order to respect the US's "treaty commitments."

Reading through the brief, you can see just how much copyright maximalists have succeeded in putting together a huge mess of international agreements (often built around issues totally unrelated to copyright, with a few copyright specific ones thrown in) that these groups can now claim require the Supreme Court to outlaw new innovations like Aereo. It further cites rulings in the EU and Canada that it suggests require the Supreme Court to follow suit. While there are some Justices who have made it clear time and time again that they don't care what foreign courts say, others have shown a willingness to follow suit.

Either way, this brief yet again highlights just how nefarious these international trade agreements can be, and how they can come back to bite new innovations years later. Defenders of copyright maximalism will insist that things like TPP and TTIP/TAFTA will have no impact on US law, but if those agreements come into force, you can bet that future US innovations will get stomped out of existence with certain players pointing to those agreements as a reason they need to be shut down.

from the your-talking-points-suck dept

As I've been noting, Comcast lobbyists have certainly fired up their sound wall of paid PR folk, consultants, think tanks, and other policy tendrils in a fairly weak attempt to convince everyone that an immeasurably larger and more powerful Comcast is going to be a good thing for everybody. Most of the arguments (correctly) focus on the fact that Time Warner Cable and Comcast don't directly compete so there's no harm, while ignoring that Comcast's ever-increasing size makes it easier for Comcast to bully disruptive Internet video companies using usage caps, restrictive licensing agreements, and peering relationships.

Most of the editorials are quite a lot of fun, like this one by Doug Brake of the Information Technology and Innovation Foundation. The ITIF, if you'd forgotten, was a big backer of SOPA and has championed all manner of IP maximalism, most recently through their support of the TTP agreement. They take money from broadband providers and the MPAA, not that Forbes or anybody else can ever bother to point this out. According to Brake, criticism of the merger is something that's being fabricated by "paranoid bloggers" and spreaders of "misinformation," whose "populist" thinking gives cable companies a bad rap:

"It is popular, especially in the blogosphere, to automatically distrust cable and telecommunications companies, a stance that often leads to inaccurate statements and misunderstandings."

Gosh, that distrust couldn't possibly come from the fact that Comcast is among the lowest ranked companies for customer satisfaction in what's the lowest ranked industry for customer satisfaction across all industries? Bi-annual rate hikes for channels never watched? Full-day technician visit windows that get bumped numerous times for no reason? Jacking up modem rental fees? Horrible customer support? Burying rate hikes misleadingly in below-the-line fees? Any of this ringing a bell, Doug? It's worth noting that brand impression of Time Warner Cable has actually somehow gotten even worse since the merger was announced, which is pretty impressive.

Brake stumbles forth valiantly to then argue that those worried about a larger Comcast needn't do so -- because competitive pressure from phone companies will keep Comcast executives honest:

"The broadband populists that dominate this conversation like to claim that DSL is not fast enough to be a competitor to cable. But some of DSL’s 31 million subscribers (compared to cable’s 51.5 million) might disagree. And there is good reason to expect DSL speeds to improve – new technology, called vectored DSL, promises 100 Mbps under the right circumstances. And of course, in 6 of the 19 metros, Verizon FIOS fiber service is a robust competitor."

First, I'm not entirely sure in what world being a "populist" is an insult; the dictionary definition of populism suggests someone who is looking out for the people (what a bunch of jerks). Second, if the argument is that the phone companies will keep Comcast honest as they grow, apparently Mr. Brake isn't aware of the fact that AT&T and Verizon are backing away from huge swaths of the fixed-line broadband market because they don't want to upgrade them (as in, ever), which would leave the freshly-merged Comcast Time Warner Cable with less competition than ever before. In turn, Comcast will soon have a greater ability to impose the usage caps they've been busy testing in uncompetitive markets without competitive repercussions. Brake then goes on to repeat another core merger supporter talking point -- Google Fiber will somehow keep Comcast honest:

"Let’s not forget another big announcement made on the heels of the merger proposal – Google has started early plans to expand its fiber build-out to nine new metro areas. The timing of Google’s release exposes a key flaw in Crawford’s arguments against the merger: immediately after Comcast’s announcement, many detractors dismissed Google fiber as a viable competitor to cable because it is in only a handful of cities."

Right, except that that Google Fiber announcement to "expand to nine new metro areas" never actually stated anything of the sort, something Brake would know if he'd actually read it. Google Fiber, which currently only serves a handful of users in Kansas City and Provo, Utah, simply announced it would work with cities in nine markets to examine improving infrastructure. One or two might actually see service sometime by 2015, but it's not keeping Comcast executives up at night anytime soon. This talking point that companies like Google Fiber and Hulu (which Comcast co-owns) will generate enough pressure to keep Comcast honest is laughable, but it keeps getting trotted out like an ugly show pony.

You'd think for the money Comcast is pouring into these think tanks annually, one of them would actually understand the industry they're writing about and be able to make coherent arguments in support of the merger. Surely there have to be some legitimate benefits to letting Comcast get immensely more massive? Perhaps suggest that shiny new taxpayer-subsidized skyscraper Comcast is building in Philadelphia will scare away the foul shard devils from the vile astral plane of Kerithuth? Maybe suggest the combined new super Comcast will impact the earth's gravitational pull just enough to give us all super powers that could help us fight said looming cross-dimensional invasion? Surely these groups can do better. Paranoid populists everywhere demand it!